© Constructing Excellence NZ Limited
© Constructing Excellence NZ Limited
Vision, Mission & Objectives
Our Purpose
Guiding Principles
Steering Group
Knowledge Exchangeo End 2007 Event
Projectso Benchmarking Club
o Pathfinder Projects
o Increase Client membership
© Constructing Excellence NZ Limited
Vision, Mission & Objectives
NZ VisionFor the NZ construction industry to realise maximum value to all clients,
end users and partners and exceed their expectations through the sustainable delivery of world-class products and services.
© Constructing Excellence NZ Limited
Vision, Mission & Objectives
CCG MissionCCG leads change to deliver improved industry performance resulting
in a demonstrably better built environment.
© Constructing Excellence NZ Limited
Vision, Mission & ObjectivesCCG Vision
© Constructing Excellence NZ Limited
Vision, Mission & Objectives
We will achieve our Vision by:Providing a unique bridge within the industry which includes clients, end users and partners such as consultants, contractors, suppliers, researchers, educators and industry bodies
Becoming a ‘Centre of Excellence’ for Construction Clients
Aiding learning in ‘How to be a better Client’
Sharing challenges, to act as support for each other and a peer group
Creating influence & change Client Practice
Creating an environment for those clients that already recognise that there is a ‘better way’ to move on to the next level, innovate & develop better procedures.
Supporting clients in making the business case for integrated teams & best practice
© Constructing Excellence NZ Limited
Vision, Mission & Objectives
Our Purpose
Guiding Principles
Steering Group
Knowledge Exchangeo End 2007 Event
Projectso Benchmarking Club
o Pathfinder Projects
o Increase Client membership
© Constructing Excellence NZ Limited
Benchmarking
The key to the door of unlocking Relationship Contracting
Wellington Construction Clients’ Group
© Constructing Excellence NZ Limited
Agenda
What is Benchmarking?
Why is it the key to successful Relationship Procurement?
Who is ‘doing it’ & where?
© Constructing Excellence NZ Limited
Rethinking Construction
Establish Relationship Contracting/Integrated Teams
Measure Performance
Drive out Waste
© Constructing Excellence NZ Limited
Rethinking Construction
Establish Relationship Contracting/Integrated Teams
Measure Performance
Drive out Waste
Teams
Measure
Drive out Waste
Teams Measure & Drive out Waste
© Constructing Excellence NZ Limited
What is Benchmarking?
Measuring performance
Comparing performance
Setting Targets
Improving Performance
“If you don’t measure you can’t manage”
“Weighing the pig does not make it grow
fatter”
"Who performs better?"
"Why are they better?" "What actions do
we need to take in order to improve our performance?"
© Constructing Excellence NZ Limited
What is Benchmarking?
CCG visit to Costain 2006
Best in Class = 89.9%
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Why is it the key to successful Relationship Procurement?
What is Relationship Procurement?
QualitySelection
Alliancing
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What is an integrated team?
Wasted time
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What is an integrated team?
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What is Relationship Procurement?
© Constructing Excellence NZ Limited
Why is it the key to successful Relationship Procurement?
What is Relationship Procurement?
What do they have in common?
Best for Project
© Constructing Excellence NZ Limited
Why is it the key to successful Relationship Procurement?
What is Relationship Procurement?
What do they have in common?
Why don’t more clients do it?
Few case studies
Lowest PriceConcerns
© Constructing Excellence NZ Limited
Why is it the key to successful Relationship Procurement?
What is Relationship Procurement?
What do they have in common?
Why don’t more clients do it?
What will give client’s confidence in Relationship Procurement?
Teams to be delivering
consistentlybetter performance
on projectsover time
© Constructing Excellence NZ Limited
Why is it the key to successful Relationship Procurement?
What will give client’s confidence in Relationship Procurement?
Teams thatdrive out waste!
Captial Cost reductions 14%
Programme reductions 30%
Cost & TimePredictability
95%
CustomerSatisfaction
25%
Reductionin defects
30%
Site accidentreductions
95%
© Constructing Excellence NZ Limited
Building success through an integrated team
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Process Improvement - Fit Out of 23,000 sq ft Club
4
4
6
8
8
3
3
4
5
3
3
8
6
6
13
16
22
24
1
1
1
5 6
0 10 20 30 40 50 60
2001
2000
1999)
1998
Feasibility Scheme Design Employers Requirements
Contractors Proposal Select Contractor Detailed Design / Lead In
Construction
Weeks
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
‘98 ‘99 ‘00 ‘01
AddedValue£ / ft²
TheValue Curve
0
100
£ 3
£ 1
£ 3
£ 2£ 2
£ 1
£ 4
Central Plant
65 67
Business Benefit
SpinningStudio
Extra DanceStudios
Business BenefitBusiness Benefit
DDARequirements
55
67
50
66
60
20
40
60
80
Cost / ft²
0
10
2
4
6
8
• Cost Performance
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
0
25
50
75
100
‘98 ‘99 ‘00 ‘01
“Our goal iszero defects”
Number ofDefects at
PC
• Quality Performance
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Value ratio 1500 x 50 x 28 = £2,100,000
Why is it the key to successful Relationship Procurement?
The Real Value to the Client
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Hertfordshire Frameworks
Why is it the key to successful Relationship Procurement?
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Why is it the key to successful Relationship Procurement?
Delivering Schools
New build & refurbishment programme
Around £20m (70 projects) per annum
Traditionally tendered
© Constructing Excellence NZ Limited
Sample Tendering costs
4 tenderers per project
3 unsuccessful tenders
100 projects
4 people x 4 person days per tender @ £250 per day
Therefore:
300 tenders x 16 person days x £250 = £1.2 Million
Who pays for this waste?
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Setting Targets
+4%
+2%
61%46%
50%63%
99058%65%73%
Industry*
No Data
No Data
36%41%
39%17%
No Data36%57%50%
HCC Now
-15%Change compared with on year ago
Construction Time
-5%Change compared with one year ago
Construction Cost
85%% on target or betterPred Construction Time85%% on target or betterPred Design Time
80%% on target or betterPredict Construct Cost85%% on target or betterPredict Design Cost
300Mean Accident Incidence rate per 100k employed
Safety100%% scoring 8/10 or betterDefects85%% scoring 8/10 or betterClient Sat - Service90%% scoring 8/10 or betterClient Sat - Product
TargetMeasureKPI
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Some early indicators
First two projects finished:— On time
— Within Budget (second one under budget)
— Zero defects on second project (first one just a few with no impact)
— Delighted customers
— No accidents
The second project reduced the time to start on site by 70% from normal!— 5 weeks from 15 weeks!
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Three years in…
Met Year Five Targets in year three!
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Three years in…
Met Year Five Targets in year three!
Why is it the key to successful Relationship Procurement?
© Constructing Excellence NZ Limited
Agenda
Introduction to Constructing Excellence
What is Benchmarking?
Why is it the key to successful Relationship Procurement?
Who is ‘doing it’ & where?
How can we develop the Benchmarking habit?
© Constructing Excellence NZ Limited
Dept of Corrections— Collaborative Working Arrangement
Transit— Grafton & Northern Gateway
Queenstown Lakeside District Council— Frameworks for Consultants & Contractors
New Zealand Defence Force— Contractor Panels
Auckland City Council— Alliances
Who is ‘doing it’ & where?
Relationship Procurement
© Constructing Excellence NZ Limited
CAENZ— The National Construction KPIs
The Construction Client’s Group— Benchmarking Club
The NZ Construction Best Practice Programme
Who is ‘doing it’ & where?
Benchmarking
© Constructing Excellence NZ Limited
Who is ‘doing it’ & where?
Case Study – Naylor Love
Began benchmarking 2005
Use National KPIs
Set up a ‘Best Practice Programme’
Measured, analysed and improved!— Two key areas of concern
— Delivery to Time
— Defects
The Results…
“Naylor Love makes great headway on improvement!”
© Constructing Excellence NZ Limited
Who is ‘doing it’ & where?
Delivery on Time
“Naylor Love makes great headway on improvement!”
47% uplift
© Constructing Excellence NZ Limited
Who is ‘doing it’ & where?
Delivery on time
“Naylor Love makes great headway on improvement!”
© Constructing Excellence NZ Limited
Who is ‘doing it’ & where?
Defects
“Naylor Love makes great headway on improvement!”
39% uplift
© Constructing Excellence NZ Limited
Who is ‘doing it’ & where?
Defects
“Naylor Love makes great headway on improvement!”
© Constructing Excellence NZ Limited
How can we develop the Benchmarking Habit?
National Construction Industry Benchmarks
WWW.CAENZ.com
ClientSatisfaction
TimePredictability
CostPredictability
Safety
Profitability
Quality
© Constructing Excellence NZ Limited
How to use Benchmarking to improve
Case Studies
© Constructing Excellence NZ Limited
Measuring the project score
1. The Project — The Score
— The Benchmark
During a survey, a client scores a project
6 out of 10for
“Satisfaction with the Service”
© Constructing Excellence NZ Limited
Measuring the project score
1. The Project — The Score
— The Benchmark25%
Benchmark Score
© Constructing Excellence NZ Limited
Measuring the project score
25% Benchmark
Score
0%20%40%60%80%
100%
Client satisfaction product
Client satisfaction service
Defects
Predictability of cost of design
Predictability of cost of construction
Predictability of construction time
Predictability design time
Safety
Profitability
`
25%
© Constructing Excellence NZ Limited
Measuring the project score
25% Benchmark
Score
Client satisfaction product
Client satisfaction service
Defects
Predictability of cost of design
Predictability of cost of construction
Predictability of construction timePredictability design timeSafety
Profitability
60%
60%
82%
51%
29%
47%77%
43%
© Constructing Excellence NZ Limited
Reporting the Results
0%
20%
40%
60%
80%
100%
Client satisfaction product
Client satisfaction service
Defects
Predictability of cost of design
Predictability of cost of construction
Predictability of construction time
Predictability design time
Safety
Profitability
`
60%
25%
51%
82%29%
47%
77%
43%
60%
© Constructing Excellence NZ Limited
Reporting the Results
0%
20%
40%
60%
80%
100%
Client satisfaction product
Client satisfaction service
Defects
Predictability of cost of design
Predictability of cost of construction
Predictability of construction time
Predictability design time
Safety
Profitability
`
60%
25%
51%
82%
29%
47%
77%
43%
© Constructing Excellence NZ Limited
Measuring the Company score
© Constructing Excellence NZ Limited
Reporting the Results
Getting the Culture rightNo blame
moritorium
Be Objective
Reward progress rather than
absolute results
Encourage the team to embrace poor results as opportunities
Improvement is more important than ‘top marks’
© Constructing Excellence NZ Limited
Reporting the Results
Company A
0%20%40%60%80%
100%
ClientSatisfaction -
Product
ClientSatisfaction -
Service
Defects onHandover
Cleareddefects within
14 days
SafetyAccidents
PredictabilityConstruction
Cost
PredictabilityConstruction
Time
Mace Score Industry AveragePilot
© Constructing Excellence NZ Limited
Reporting the Results
Company B
0%
20%
40%
60%
80%
100%
Client Satisfaction ClientSatisfaction - Product
Client Satisfaction ClientSatisfaction - Service
Defects on Handover
Defects Cleared defects within14 daysSafety Accidents
Cost PredictabilityConstruction Cost
Time PredictabilityConstruction Time
Company Score Industry Average
© Constructing Excellence NZ Limited
Case Studies
In Groups of three:
—Calculate the results
—Plot them on the radar chart
—Discuss the projects—What happened
—Is the client happy?
—What action might be taken
—Report back
© Constructing Excellence NZ Limited
Project 1Acme Retail Limited
© Constructing Excellence NZ Limited
Project 2Royal Building Developments Ltd
© Constructing Excellence NZ Limited
Project 3Public Housing Limited
© Constructing Excellence NZ Limited
Your Questions!